Don’t let what happened to me, happen to you. Getting my finances in order required reading my credit card statements and repayment agreement closely. I discovered in the event of default, my credit card company had the right to increase the interest rate (which they had done). I thought default meant I must have submitted payment late or missed it completely (which I knew I didn’t do). Upon closer inspection, I learned that one of the conditions of default was to exceed the monthly limit. I had a $5,000 credit limit, spent $6,000 one month, paid it in full the following month, but I was still considered in default on the entire $6,000. Don’t let credit card companies trap you.

Along with the lowest savings rate in the industrial world, the United States had the highest consumption rate. We save the least and spend the most. Debt is the vehicle by which greater consumption is made possible. As the ratio of debt goes up, society adapts and says it’s OK. For example, as homes go up in value, many people refinance their homes to afford vacations, pay off credit cards, etc. This leads to big problems if you first don’t learn how to curb your spending. I know many wealthy people that have played this game to their detriment. Instead of doing something wise with the money, too many people pull equity out of the house and use it to spend more, increasing debt. The stock market and real estate market don’t solve the problem because we don’t pause long enough to reap the benefit that’s inherent in those booms—we just spend more and continue the cycle.

The power of the charge card—how do you compare to the average American?
• The average American has 11 credit cards, which is up from seven in 1989.
• Credit cards in circulation have increased 34 percent.
• Credit card transactions have gone up 55 percent.
• The overall value of credit card transactions has increased 98 percent. We doubled what we spent with credit cards between 1988 and 1994

A 1973 graduate of Pratt Institute, Barry began his career illustrating books, magazines and ads. His client list included New York Magazine, The New York Times, Random House, Ziff Davis Publications, American Express Publishing, IBM and other fortune 500 companies.

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